Fix To Clean Energy Funding Given Skeptical Reception

HARTFORD — Clean energy advocates looked skeptically at a complicated budget fix that appears to make whole the state's clean energy fund after legislators raided tens of millions from it to fill a budget gap.

Next year, the budget transfers to the General Fund $6 million of what would have been allocated to the state's Clean Energy Finance and Investment Authority. For the 2015 fiscal year, it takes $19 million.

The fund's president, Bryan Garcia, said that legislators fixed the problem and that the fund's operations shouldn't be affected, an outcome that an initial analysis says is probable, depending on how its implemented.

"We expect those transfers to be covered," Garcia said. "The final budget reflected the governor's and legislature's commitment to us."

But even with the bright possibility of a fix, environmentalists and representatives from clean energy businesses said at a midday press conference that the raid of the fund gives the wrong message to the renewable energy industry, raising questions about the state's commitment to clean energy.

"To prostitute this fund each time the legislature cannot balance its budget is wrong," said Michael Trahan, executive director of Solar Connecticut, whose members include solar installers that get about $10 million a year from the fund. "You can imagine how they feel when they are facing the day when those funds are put into jeopardy."

John Harrity, from the Connecticut Rountable on Climate and Jobs, said: "It feels like we are robbing our kids' piggy bank — because they are going to inherit the economy we help, or fail, to grow."

To fix the loss of clean energy funds, legislators gave the state's energy commissioner, Daniel Esty, the discretion to redirect money that the state gets from the region's cap and trade program, known as the Regional Greenhouse Gas Initiative, to the clean energy fund.

The cap and trade program works because nine states in the region require that power plants of a certain size buy offsets for their carbon dioxide emissions. Proceeds go to the states to invest in energy efficiency programs and development sources of clean energy.

Revenue from the sale of offsets is expected to jump this year as tighter greenhouse gas regulations are put into effect, and depending on that increase, it could cover the funds transferred to the budget, according to William Dornbos, the Connecticut director of Environment Northeast.

"It's also a possibility, depending on [Esty's] discretionary authority, that they could get a funding increase if the auction proceeds are on the higher end," he said.

That said, a "make whole" situation relies on a number of positive outcomes: the greenhouse gas auction revenues increasing, and the energy commissioner allocating full funds to the clean energy fund. Environmentalists know this and say they're watching closely.

Chris Phelps, campaign director of Environment Connecticut, at a press conference Thursday said that its clean that "the effort to mitigate the harm is real," however unfinished.

"The money isn't back in the bank, as it were, and it's dependant on other things happening and other revenue streams," he said.

And even if the fund switching solves the problem with the clean energy fund, it could come at the expense of utility-run energy efficiency and conservation programs.

The discretion for how to distribute the greenhouse gas funds gives Esty the ability to cap that source of funding for the utilities' conservation programs at where it was proposed for this year — about $5 million, Dornbos said.

Complicating the situation, the utilities rely on proceeds from the greenhouse gas auctions to specifically fund efficiency and conservation programs for oil customers, who don't otherwise pay into general ratepayer conservation funds.